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How carve-outs can help in your journey to S/4HANA – A Carve-Out Blog Series

Estimated reading time: 4 minutes

 

By now, you should know what a carve-out is, how it differs from standard SAP projects, and the different ways to execute in the event you find yourself in an M&A scenario. If not, please go back and read parts 1-4 of this blog series. Now, what if you’re one of the thousands of companies out there that may never experience something like this? You will be surprised to know that the underlying technology behind complex carve-outs is very similar to what we now call Selective Data Transition for SAP S/4HANA. Let’s take a closer look.

 

First, let’s start with defining what Selective Data Transition (SDT) is. Everyone in the SAP world is familiar with the terms greenfield and brownfield, and maybe you know them as New Implementation and System Conversion now that SAP has moved away from that nomenclature. In simplistic terms, SDT covers the wide range of grey that exists between greenfield and brownfield. A few select SAP partners can provide a “data-first” transition approach that is more flexible, less risky, and in a shorter time frame through specialised transformation software.

You may be asking yourself, what does this have anything to do with carve-outs? Let’s take a step back and put ourselves in the shoes of a company planning a move to SAP S/4HANA. Greenfield seems like a monumental task, rebuilding your entire SAP infrastructure from scratch without any historical data whatsoever. On the other hand, building a business case through a brownfield conversion may be challenging since you have a lot of redundant, irrelevant data you don’t need cluttering your upgraded environment. As you can imagine, these two one-size-fits-all options had many SAP customers scratching their heads, and, in my opinion, one of the main reasons behind the slow adoption of SAP S/4HANA.

What do carve-outs have anything to do with migrating to SAP S/4HANA? Let’s imagine Company X is a large, global enterprise with a massive SAP footprint worldwide. Greenfield is out of the question because it’s too expensive, will take years to execute, and you need historical data in the age of the data-driven enterprise. Brownfield, on the other hand, is way too risky. No one wants a global big-bang Go-Live with a multi-day cut-over to bring the entire organisation to a halt. Not to mention the slightest of issues could cause your entire system to be compromised. This would be the ideal candidate for a Selective Carve-Out migration to SAP S/4HANA. However, instead of a seller and a buyer, you have your legacy ECC and target the S/4HANA system. Are you starting to connect the dots?

 

How it works

A selective carve-out migration to SAP S/4HANA allows Company X to mitigate risk and move at the pace of the business by splitting up the otherwise big-bang conversion into multiple steps. Carve out a specific company code or region from the legacy ECC system and covert that into S/4HANA. Use this as a sort of proof-of-concept. Ensure all your processes are working the way they are supposed to before migrating subsequent company codes or regions and merging them into your new S/4HANA environment. The beauty of this approach is that it also allows you to leave redundant data behind, making your new S/4HANA system leaner and free of unnecessary or unused data. The result is the same: start with a single global instance on ECC, end with a single global instance on S/4HANA.

A similar concept can be applied to a smaller company opting for a greenfield implementation. Once they are done setting up the new greenfield system, carve out whatever data you have decided to be in scope and merge it into your new greenfield system. A great example of this is SPS Companies. SPS’ initial situation was not exactly this one. They had just acquired a business in 2018 and decided to use this as a proof-of-concept for SAP S/4HANA instead of integrating it into their ECC environment. After their S/4HANA was configured the way they wanted it to. They selectively migrated 15 of 30 company codes and only five years’ worth of data into their new environment. No two businesses are the same, so Selective Data Transition is an individual, customised approach to migrate to SAP S/4HANA on your terms.

 

More on Selective Data Transition

If you’re interested in learning more about Selective Data Transition, please review our website or reach out, as we’d be happy to share more unique customer stories. cbs is a founding member of SAP’s Selective Data Transition Engagement community of partners and has been at the forefront of complex data migration projects for SAP customers over the past two decades. Leveraging our unique transformation software, ET Enterprise Transformer, we have successfully completed over 2000 projects for SAP customers worldwide.

In the age of data-driven enterprise, data is more critical than ever. None of this brings value without quality data from reporting and analytics to machine learning and artificial intelligence. The team at cbs has the experience to help organisations set the foundation for transforming their business into the 21st century with SAP S/4HANA.

Call us today to schedule a free consultation.

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Holger Bock
Managing Director / cbs Asia-Pacific
cbs Asia Pacific Pte. Ltd. cbs Malaysia Sdn. Bhd.